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Voluntary Benefits

This is the Voluntary Benefits category of the Broad REach Benefits blog. At Broad Reach Benefits, we focus on employers that have between 30 and 500 benefit eligible employees. We’re employee benefit specialists, not a big box brokerage firm or payroll company with a sales force peddling policies.

Congress Passes Another Temporary Telehealth Safe Harbor

On March 15, 2022, the President signed the Consolidated Appropriations Act, 2022 (H.R. 2471) into law (“CAA 2022”).  The CAA 2022 is largely a spending bill but also includes, among other things, a much-anticipated new telemedicine safe harbor similar to that which was created under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).  The safe harbor allows high deductible health plans (HDHPs) to cover medical and behavioral health treatment before participants meet their deductibles (i.e., without cost sharing).  The safe harbor applies from April 1, 2022, through December 31, 2022, regardless of plan year.

Background on Telehealth Safe Harbor under the CARES Act

On March 27, 2020, the CARES Act became law. While the CARES Act was largely an economic package intended to stabilize individuals and employers during COVID-19-related shutdowns, it also included several measures directly related to employee benefits. One specific provision was the safe harbor under which HDHPs could cover telehealth and other remote care without cost-sharing. As a result, no-cost telehealth could be provided to plan participants for any reason–not just COVID-19 related issues–without disrupting HSA eligibility.

The CARES Act safe harbor was a temporary measure, applying only to plan years beginning on or before December 31, 2021, which means, for calendar year plans, the safe harbor expired on December 31, 2021.  Without the safe harbor, telehealth programs that provide “significant benefits” in the nature of medical care or treatment generally disrupt HSA eligibility.  Whether benefits are “significant” is a facts and circumstances determination.  That said, in cases where a telehealth program provides robust benefits, such as medical advice and diagnosis for a broad range of non-emergency, common medical illnesses, general referrals to other provider types (including the emergency room), and certain …

By |March 21st, 2022|Broad Reach Benefits, Employee Benefits, Employee Communications, IRS, Legislation, Medical, Voluntary Benefits, Wellness|Comments Off on Congress Passes Another Temporary Telehealth Safe Harbor
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Legal Alert-Agencies Issue Additional Guidance on OTC COVID-19 Tests

On February 4, 2022, federal agencies released additional FAQs related to coverage of over the counter (“OTC”) COVID-19 tests by group health plans and health insurance carriers.  The FAQs are intended to clarify the previous FAQs released on January 10, 2022.

Prior Guidance

On January 10, 2022, the agencies released initial guidance for plans and carriers, which required them to cover FDA approved at-home, OTC COVID-19 tests without cost sharing, prior authorization, or medical management, and without the need for a prescription or recommendation of a health care provider.  These requirements apply during the COVID-19 public health emergency.  Notably, plans and carriers are not required to cover OTC COVID-19 tests purchased or used for workplace testing/employment purposes.

Plans and carriers may reimburse participants for their purchase upon submission of a claim or by reimbursing the entity who sold the test directly. The guidance provided for two safe harbors, which permit plans and carriers to:

  1. limit reimbursement to the lower of the actual price or $12 per test if the plan arranges for direct-to-consumer coverage of OTC COVID-19 tests that meet the FFCRA criteria through both its pharmacy network (or another entity designated by the plan or carrier) and a direct-to-consumer shipping program; and
  2. limit coverage to no less than eight (8) tests per Individual for a 30-day or one month period.

In order to limit reimbursements for tests purchased from non-preferred providers, plans must ensure there are an adequate number of retail locations (in-person and online) with access to OTC COVID-19 tests and communicate necessary information about the direct coverage program, including when it is available and which retail pharmacies are available.

New Guidance

The guidance issued on February 4, 2022 (which is generally effective prospectively for purposes of …

By |February 16th, 2022|Compliance, Employee Benefits, Employee Communications, Legislation, Medical, Voluntary Benefits, Wellness|Comments Off on Legal Alert-Agencies Issue Additional Guidance on OTC COVID-19 Tests
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Summary of Mental Health Parity and Transparency Provisions Under the Consolidated Appropriations Act, 2021

The Consolidated Appropriations Act, 2021 (the “CAA”), which was signed into law on December 27, 2020, included several provisions impacting group health plans and health insurance issuers.  Below is a summary of the provisions focused on mental health parity and health plan transparency (specifically, broker/consultant commissions and pharmacy benefits and drug costs).

Mental Health Parity

The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), prohibits a group health plan from applying financial requirements (e.g., deductibles, co-payments, coinsurance, and out-of-pocket maximums), quantitative treatment limitations (e.g., number of treatments, visits, or days of coverage), or non-quantitative treatment limitations (such as restrictions based on facility type) to its mental health and substance use disorder benefits that are more restrictive than those applied to the plan’s medical and surgical benefits.

MHPAEA compliance has been a focus in DOL audits in recent years.  As part of the action plan for enhanced enforcement in 2018, the DOL, HHS and IRS released a self-compliance tool plans and issuers can use to evaluate their plan.  However, Section 203 of the CAA took this a step further, requiring more active engagement by group health plans.

Beginning on February 10, 2021, group health plans were required to perform and document comparative analyses of the design and application of non-quantitative treatment limitations (NQTLs).  Specifically, the NQTL analyses must include certain information specified in the CAA, such as, among other things, specific plan terms or other relevant terms regarding NQTLs and the specific substance abuse, mental health, medical and surgical benefits to which they apply, and the factors used to determine that NQTLs will apply to mental health or substance use disorder benefits and medical or surgical benefits.

Per the CAA, the DOL, IRS (Treasury) and HHS are required …

By |August 23rd, 2021|Affordable Care Act, Compliance, Employee Benefits, Employee Communications, Health Care Reform, Human Resources, IRS, Legislation, Medical, U.S. Department of Labor, Voluntary Benefits, Wellness|Comments Off on Summary of Mental Health Parity and Transparency Provisions Under the Consolidated Appropriations Act, 2021
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Agencies Release First Rule on the No Surprises Act

On July 13, 2021, the DOL, HHS, and IRS released a joint Interim Final Rule implementing specified provisions of the No Surprises Act, a new law included within the Consolidated Appropriations Act, 2021.  The No Surprises Act addresses, among other things, a prohibition on surprise billing, which impacts emergency room parity rules previously implemented under the Affordable Care Act (“ACA”) and ACA provisions related to provider choice.

The Interim Final Rules will be finalized on September 13, 2021 and apply for plan years beginning on or after January 1, 2022.

Background 

ACA Provider Choice and Emergency Services Requirements

Under §2719A of the ACA, most group health plans that require designation of a participating primary care provider must permit the participant or beneficiary to designate an available, participating primary care provider of their choice, and must inform participants of their ability to make a designation or, if they don’t, a primary care provider will be designated for them. A participant can designate a pediatric primary care provider for children, and the notice must inform participants and beneficiaries that they do not need prior authorization from the plan to access participating Ob-Gyn providers, though prior authorization may be required for certain services and providers may have to comply with any referral processes.  The ACA did not extend these requirements to “excepted benefits” such as stand-alone dental or vision plans, and grandfathered health plans were exempt from complying.

Additionally, §2719A of the PHSA requires emergency services to be provided:

  • Without prior authorization (whether they are provided by an in-network or out-of-network provider);
  • Without regard to whether the health care provider furnishing the emergency services is a participating network provider with respect to the services; and
  • Without imposing administrative requirements or limitations on …
By |August 10th, 2021|Affordable Care Act, Compliance, Employee Benefits, Employee Benefits Adviser, Employee Communications, Health Care Reform, IRS, Medical, U.S. Department of Labor, Voluntary Benefits, Wellness|Comments Off on Agencies Release First Rule on the No Surprises Act
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IRS Releases Second Quarter Form 720 for PCORI Fee Payments

Employers that sponsor self-insured group health plans, including health reimbursement arrangements (HRAs) should keep in mind the upcoming July 31, 2021 deadline for paying fees that fund the Patient-Centered Outcomes Research Institute (PCORI).  As background, the PCORI was established as part of the Affordable Care Act (ACA) to conduct research to evaluate the effectiveness of medical treatments, procedures and strategies that treat, manage, diagnose or prevent illness or injury.  Under the ACA, most employer sponsors and insurers are required to pay PCORI fees until 2029, as it only applies to plan years ending on or before September 30, 2029.

The amount of PCORI fees due by employer sponsors and insurers is based upon the number of covered lives under each “applicable self-insured health plan” and “specified health insurance policy” (as defined by regulations) and the plan or policy year end date.  This year, employers will pay the fee for plan years ending in 2020.

The fee is due by July 31, 2021 and varies based on the applicable plan year as follows:

  • For plan years that ended between January 1, 2020 and September 30, 2020, the fee is $2.54 per covered life.
  • For plan years that ended between October 1, 2020 and December 31, 2020, the fee is $2.66 per covered life.

For example, for a plan year that ran from July 1, 2019 through June 30, 2020 the fee is $2.54 per covered life. The fee for calendar year 2020 plans is $2.66 per covered life. The insurance carrier is responsible for paying the PCORI fee on behalf of a fully insured plan.  The employer is responsible for paying the fee on behalf of a self-insured plan, including an HRA.  In general, health FSAs are not subject …

By |May 19th, 2021|Employee Benefits, Employee Communications, Human Resources, IRS, Medical, Private Health Care Exchange, U.S. Department of Labor, Voluntary Benefits|Comments Off on IRS Releases Second Quarter Form 720 for PCORI Fee Payments
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IRS Releases 2022 HSA Contribution Limits and HDHP Deductible and Out-of-Pocket Limits

In Rev. Proc. 2021-25, the IRS released the inflation adjusted amounts for 2022 relevant to Health Savings Accounts (HSAs) and high deductible health plans (HDHPs). The table below summarizes those adjustments and other applicable limits.

  2022 2021 Change
 

Annual HSA Contribution Limit

(employer and employee)

 

 Self-only: $3,650 Family: $7,300 Self-only: $3,600 Family: $7,200 Self-only: +$50 Family: +$100
 

HSA catch-up contributions

(age 55 or older)

 

 $1,000 $1,000 No change
 

Minimum Annual HDHP Deductible

 

 Self-only: $1,400 Family: $2,800 Self-only: $1,400 Family: $2,800 No change
 

Maximum Out-of-Pocket for HDHP

(deductibles, co-payment & other amounts except premiums)

 

 Self-only: $7,050 Family: $14,100 Self-only: $7,000 Family: $14,000 Self-only: +$50 Family: +$100

IRS Releases 2022 HSA Contribution Limits and HDHP Deductible and Out-of-Pocket Limits

In Rev. Proc. 2021-25, the IRS released the inflation adjusted amounts for 2022 relevant to Health Savings Accounts (HSAs) and high deductible health plans (HDHPs). The table below summarizes those adjustments and other applicable limits.

  2022 2021 Change
 

Annual HSA Contribution Limit

(employer and employee)

 

 Self-only: $3,650 Family: $7,300 Self-only: $3,600 Family: $7,200 Self-only: +$50 Family: +$100
 

HSA catch-up contributions

(age 55 or older)

 

 $1,000 $1,000 No change
 

Minimum Annual HDHP Deductible

 

 Self-only: $1,400 Family: $2,800 Self-only: $1,400 Family: $2,800 No change
 

Maximum Out-of-Pocket for HDHP

(deductibles, co-payment & other amounts except premiums)

 

 Self-only: $7,050 Family: $14,100 Self-only: $7,000 Family: $14,000 Self-only: +$50 Family: +$100

 

Out-of-Pocket Limits Applicable to Non-Grandfathered Plans

The ACA’s out-of-pocket limits for in-network essential health benefits have also been announced and have increased for 2022.

  2022 2021 Change
 

ACA Maximum Out-of-Pocket

 

 Self-only: $8,700

Family: $17,400

 Self-only: $8,550

Family: $17,100

 Self-only: +$150

Family: +$300

 

Note that all non-grandfathered group health plans must contain an embedded individual out-of-pocket limit within family coverage if the family out-of-pocket limit …

By |May 12th, 2021|Employee Communications, Human Resources, IRS, Legislation, U.S. Department of Labor, Voluntary Benefits, Wellness|Comments Off on IRS Releases 2022 HSA Contribution Limits and HDHP Deductible and Out-of-Pocket Limits
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DOL Releases Model Notices and Other Resources Related to COBRA Premium Assistance

On April 7, 2021, the U.S. Department of Labor (DOL) released a link to its webpage dedicated to the COBRA premium assistance authorized under the American Rescue Plan Act, 2021 (ARPA), the third COVID-19 stimulus bill.  The webpage includes model notices, frequently asked questions, and related information.  With the exception of the model notices, the guidance appears targeted towards impacted workers, leaving many employer-related questions unanswered.  This alert summarizes the recent guidance and model notices.

What does ARPA Provide and Who is an Assistance Eligible Individual?

Among other things, the ARPA provides a 100% subsidy for COBRA premiums for group health plans (other than health FSAs) from April 1, 2021 through September 30, 2021 for assistance eligible individuals (AEIs).  AEIs are employees and their family members who are:

  • eligible for, and enroll in, COBRA (or state mini-COBRA) due to a reduction in hours or involuntary termination of employment;
  • not eligible for other group health plan coverage or Medicare; and
  • still within their maximum COBRA continuation coverage period (generally, 18 months).

AEIs include individuals newly eligible for COBRA between April 1, 2021 and September 30, 2021, individuals who were in their COBRA election period as of April 1, 2021, and individuals who would be AEIs but whose COBRA coverage lapsed due to non-payment prior to April 1, 2021.  AEIs also include any qualified beneficiaries, such as family members, who did not elect COBRA continuation coverage when first eligible.  Generally, this means an employee (and their qualified beneficiaries) with a COBRA start date on or after November 1, 2019, would have one or more months of eligibility for the COBRA subsidy.  Therefore, employers should identify any employees involuntarily terminated or whose hours were reduced on or after October …

By |April 8th, 2021|Broad Reach Benefits, Employee Benefits, Employee Benefits Adviser, Employee Communications, Health Care Reform, Human Resources, Medical, Private Health Care Exchange, U.S. Department of Labor, Voluntary Benefits, Wellness|Comments Off on DOL Releases Model Notices and Other Resources Related to COBRA Premium Assistance
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Health Plan Rules—Treating Employees Differently

Some employers may want to be selective and treat employees differently for purposes of group health plan benefits. For example, employers may consider implementing the following plan designs:

-A health plan “carve-out” that insures only select groups of employees (for example, a management carve-out);

– Different levels of benefits for groups of employees; or
– Varied employer contribution rates based on employee group.

In general, employers may treat employees differently, as long as they are not violating federal rules that prohibit discrimination in favor of highly compensated employees. These rules currently apply to self-insured health plans and arrangements that allow employees to pay their premiums on a pre-tax basis. The nondiscrimination requirements for fully insured health plans have been delayed indefinitely.

Employers should also confirm that any health plan rules do not violate other federal laws that prohibit discrimination. In addition, employers with insured plans should confirm that carve-out designs comply with any minimum participation rules imposed by the carrier.

Health Plan Design—General Rules

Nondiscrimination Tests

In general, a health plan will not have problems passing any applicable nondiscrimination test when the employer treats all of its employees the same for purposes of health plan coverage (for example, all employees are eligible for the health plan, and the plan’s eligibility rules and benefits are the same for all employees). However, treating employees differently may make it more difficult for a health plan to pass the applicable nondiscrimination tests. Examples of plan designs that may cause problems with nondiscrimination testing include:

  • Only certain groups of employees are eligible to participate in the health plan (for example, only salaried or management employees);
  • The health plan has different employment requirements for plan eligibility (for example, waiting periods and entry dates) for different employee groups;
  • Plan benefits …
By |April 5th, 2021|Broad Reach Benefits, Compliance, Employee Benefits, Employee Communications, Health Care Reform, Legislation, Long-Term Care, Medical, Private Health Care Exchange, Section 125, U.S. Department of Labor, Voluntary Benefits, Wellness|Comments Off on Health Plan Rules—Treating Employees Differently
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EEOC Issues Notice of Proposed Rulemaking Related to Wellness Programs

Since 2019, employers faced uncertainty regarding the status of wellness program incentives under the ADA and GINA. On January 7, 2021, the EEOC issued a Notice of Proposed Rulemaking on Wellness Programs Under the ADA and GINA that addresses this issue. The proposed rules deviate somewhat from prior EEOC guidance and positions.

Specifically, the proposed rules apply the ADA’s insurance “safe harbor” to health contingent wellness programs offered as part of, or qualified as, an employer-sponsored group health plan, thereby segregating them from health contingent wellness programs offered to all employees, regardless of their participation in the employer’s health plan.  Instead, the latter are lumped in with non-health contingent wellness programs (i.e., wellness programs that involve a disability-related inquiry or medical exam but are not activity-based or outcome-based) and subject to the ADA wellness rules.

Consistent with the EEOC’s announcement in the summer of 2020, the proposed rules require any incentives provided for participatory wellness programs and/or wellness programs not offered as part of a group health plan to be “de minimis.”  If the rules are finalized as proposed, employers may no longer rely upon the 30% (or 50% for smoking cessation) limit on incentives for these types of programs.

Finally, the proposed rules amend the GINA regulations by, among other things, limiting wellness program incentives for employees who complete health risk assessments that contain information about their spouse or dependents’ family medical history or other genetic information to a similar de minimis amount.

The proposed rules are described in more detail below.

Background

As background, under the ADA, wellness programs that involve a disability-related inquiry or a medical examination must be “voluntary.”  Similar requirements exist under GINA when there are requests for an employee’s family medical history (typically …

By |January 21st, 2021|Employee Benefits, Human Resources, Legislation, Medical, Voluntary Benefits, Wellness|Comments Off on EEOC Issues Notice of Proposed Rulemaking Related to Wellness Programs
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Carrier Premium Credits and ERISA Fiduciary Obligations

Due to COVID-19 and state and local stay-at-home orders, utilization of group medical and dental insurance benefits is down.  As a result, some carriers recently notified employers that they will be issued premium credits. When asking how these premium credits should be treated by the employer, we often compare then to the ACA’s medical loss ratio (MLR) rebates.  While these premium credits are not MLR rebates, a similar decision must be made to determine whether they, like MLR rebates, are ERISA plan assets.

Background

As background, the Affordable Care Act’s MLR rule requires health insurers to spend a certain percentage of premium dollars on claims or activities that improve health care quality, otherwise they must provide a rebate to employers. At the same time the U.S. Department of Health and Human Services issued the MLR rule, the U.S. Department of Labor (DOL) issued Technical Release 2011-04 (TR 2011-04), which clarifies how rebates should be treated under ERISA.  Under ERISA, anyone who has control over plan assets, such as the plan sponsor, has fiduciary obligations and must act accordingly.

Clearly, the premium credits we are seeing are not subject to the MLR rule; however, a similar analysis applies.   TR 2011-04 clarified that insurers must provide any MLR rebates to the policyholder of an ERISA plan.  However, while the DOL’s analysis was focused on MLR rebates, it recognized that distributions from carriers can take a variety of forms, such as “refunds, dividends, excess surplus distributions, and premium rebates.”  Regardless of the form or how the carrier describes them, to the extent that a carrier credit, rebate, dividend, or distribution is provided to a plan governed by ERISA, then the employer must always consider whether it is a “plan asset” …

By |May 18th, 2020|Compliance, Employee Benefits, Employee Benefits Adviser, Employee Communications, Legislation, Medical, Private Health Care Exchange, U.S. Department of Labor, Voluntary Benefits|Comments Off on Carrier Premium Credits and ERISA Fiduciary Obligations
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